German backing boosts EU talks hope

David Cameron's hopes of renegotiating Britain's relationship with the EU have received a boost after Germany said the UK must not be put at a disadvantage by eurozone nations' moves to integrate more closely.

In a joint article for the Financial Times, Chancellor George Osborne and his German counterpart Wolfgang Schauble said any changes to EU treaties must "guarantee fairness" for member states outside the single currency bloc.

The declaration meets one of Mr Cameron's key negotiating demands - that the rights of non-eurozone states must be protected - ahead of his planned 2017 referendum on Britain's membership of the EU.

In their article, Mr Osborne and Mr Schauble said that both Britain and Germany accepted that the eurozone crisis meant that the members of the single currency needed to establish a common fiscal and economic policy.

" The UK fully recognises the progress made so far in responding to the crisis, and it supports the case for further steps forward. But as the euro area continues to integrate, it is important that countries outside the euro area are not at a systematic disadvantage in the EU," they wrote.

"So future EU reform and treaty change must include reform of the governance framework to put euro area integration on a sound legal basis, and guarantee fairness for those EU countries inside the single market but outside the single currency."

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The statement will be seen as evidence that Mr Cameron's assiduous efforts to court German chancellor Angela Merkel - including rolling out the red carpet for a high-profile visit to London - are bearing fruit.

Earlier he indicated that they intended to work closely together on measures to enable the expulsion of EU migrants who fail to find work.

Germany's coalition government is considering proposals to limit the time unemployed migrants from other EU member states can stay in the country looking for a job. An official report also recommended that welfare abuses by EU migrants should be punished by a temporary entry ban.

Mr Cameron said that he would now seek to work with the Germans and other like minded allies to see if they could tighten EU rules further.

"We'll look very closely if the Germans want to take this further," he told BBC Radio Derby.

"I talked to Angela Merkel personally last week and we are going to work with her, with the Swedish prime minister, with the Dutch prime minister, on how we can tighten up in this area because it is worthwhile work."

The Prime Minister has been under intense pressure to strengthen EU immigration rules from Tory MPs worried about the growing strength of the UK Independence Party.

In his broadcast debate with Deputy Prime Minister Nick Clegg, Ukip leader Nigel Farage repeatedly raised the issue, warning 485 million people across the EU - many from very poor countries - were currently entitled to settle "unconditionally" in the UK.

Labour's Europe spokesman Gareth Thomas said: "Labour wants to see Europe work better for Britain, and that includes reforms to ensure Europe does more to boost growth and jobs here in the UK.

"Of course, as the eurozone consolidates, there need to be proper safeguards to protect the single market.

"But what David Cameron won't admit is that, because of his arbitrary timescale of 2017, he now only has 24 months to convince all 27 member states to agree to major treaty change on the terms set by Eurosceptic Tory backbenchers.

"EU reform is possible, and necessary, but David Cameron is unable to approach it in a sensible way. The gap between what his party will accept and what our European allies can agree to remains unbridgeable."

Downing Street said Mr Schauble's comments amounted to the German government stating publicly for the first time that safeguards for non-eurozone states should not simply be negotiated on a case-by-case basis as the single currency area takes further steps towards integration, but should be underpinned formally in the EU treaties.

A Number 10 spokeswoman told a Westminster media briefing: "What we see is Germany, one of the leading players in the eurozone, accepting that there needs to be these proper safeguards put in place as further changes are made for the eurozone. That is one of the important reforms we want to see to the European Union.

"This is a German finance minister coming out and saying there will be treaty change and it must include reform of the framework to ensure the right safeguards between euro ins and euro outs."

Britain has already negotiated safeguards in relation to the development of a banking union within the eurozone, said the spokeswoman, adding: "What is significant now is that, as we move on with taking forward this EU reform, we have got the German finance minister saying we should look at how we put this on a firmer footing in terms of the treaties."

Asked whether the development meant it would be easier for Mr Cameron to achieve his plans for a renegotiation followed by a referendum by 2017, the spokeswoman said: "There are a number of reforms we would like to see to the EU, but making sure that the UK and other countries outside the eurozone remain on a level playing field is vitally important."

Other issues on which Mr Cameron wants to make progress include making the EU " more competitive, flexible and outward-looking, and addressing concerns people have about democratic legitimacy", said the spokeswoman.

Next Tuesday, Mr Cameron will host Italian Prime Minister Matteo Renzi for talks in 10 Downing Street, in the latest in a series of one-on-one discussions with EU heads of government about the priorities which should be set for the new European Commission, which is due to be appointed following the European Parliament elections in May.

The Number 10 spokeswoman stressed that Mr Cameron's goal of reforming the EU and renegotiating Britain's will involve a "long-term conversation" involving all 28 member states.

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She said: "There are signs that the debate he is leading on reform across Europe is really taking hold, with other countries coming out with issues like cutting red tape or addressing issues of the abuse of free movement."

Mr Renzi's visit will come on his first trip to the UK since becoming Prime Minister in February, though he and Mr Cameron have already met at European Council summits earlier this month.

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